CK Group’s A$13 billion (US$9.4 billion) bid for gas pipeline operator APA Group was knocked back by Australia’s government on national security grounds, a decision that has the potential to further inflame diplomatic tensions with China.

“I have advised the consortium led by CK Asset Holdings of my preliminary view that its proposed acquisition of APA Group would be contrary to the national interest,” Treasurer Josh Frydenberg said on Wednesday.

His view was based on concerns it would lead to an undue concentration of foreign ownership by a single company group in one of the country’s most significant gas transmission businesses. Frydenberg said he would make a final decision within two weeks.

In response, CK Group said: “The CK Group notes the specific reference in today’s announcement that the Treasurer’s preliminary view reflects the size and significance of the APA Group, which is by far the largest gas transmission system owner in Australia; and that the preliminary view is not an adverse reflection on the CK Group, and the Australian government welcomes CK Group’s investments in Australia and its broader contribution to the Australian economy.”

The decision scuppers the Hong Kong-based conglomerate’s biggest overseas deal, which would have given it control of pipelines that deliver about half of Australia’s gas. Rising electricity prices and blackouts have made energy security a hot political issue in the country, and an overseas acquisition of critical infrastructure would have been sensitive for Prime Minister Scott Morrison’s government.

Morrison, who served as treasurer before becoming prime minister in August, has blocked several deals involving China-linked companies in the past three years, drawing ire from the government in Beijing. Ties between the two countries have been strained since December after the government implied China was meddling in Australian politics and media.

As the most China-dependent developed economy, Australia potentially has a lot to lose should relations with its biggest trading partner deteriorate further. Wine companies complained this year that the frayed ties were behind shipments being delayed at Chinese ports.

CK Group’s cash offer was split among subsidiaries CK Asset Holdings, CK Infrastructure Holdings and Power Assets Holdings. It was cleared in September by the competition regulator, after the conglomerate agreed to sell natural gas pipeline and storage infrastructure assets in Western Australia to appease antitrust concerns.

CK, whose Australian portfolio includes power distributor Duet Group, has been blocked in the country before. The government rejected a bid by CK Infrastructure in 2016 for the electricity network Ausgrid, saying it would undermine national security. State Grid Corporation of China’s efforts to buy a controlling stake in the electricity distributor were also rejected.

The energy industry is not the only sector subject to high levels of scrutiny by Australia’s Foreign Investment Review Board. Morrison vetoed the sale of iconic cattle company, S. Kidman & Co., in 2016 to a Chinese-led group saying it could be against national interest.

In August, the government banned China’s Huawei Technologies and ZTE from supplying next-generation wireless equipment to the country’s telecoms operators. That prompted criticism from Beijing.

“Instead of exploiting all kinds of excuses to create hurdles and taking discriminatory measures, we urge the Australian side to abandon political biases and create a sound environment for fair competition for Chinese enterprises in Australia,” Foreign Ministry spokesman Lu Kang said at the time.